BOSTON, July 16 /PRNewswire-FirstCall/ -- Wainwright Bank & Trust Company (NASDAQ:WAIN) reported 2007 second quarter consolidated net income of $1,718,000 and diluted earnings per share of $.20 ($.22 per basic share). This compares to consolidated net income of $1,708,000 and diluted earnings per share of $.20 ($.21 per basic share) for the quarter ended June 30, 2006. Consolidated net income for the six months ended June 30, 2007 is $3,557,000, $164,000 higher than the previous six month record earnings of $3,393,000 for the same prior year period. Diluted earnings per share were $.41 for the six months ended June 30, 2007 ($.45 per basic share) compared to diluted earnings per share of $.39 for the six months ended June 30, 2006 ($.42 per basic share). All prior period earnings per share amounts have been adjusted to reflect the 5% common stock dividend declared and paid in the second quarter of 2007. The Bank's average outstanding loan balances grew $68 million or 12% from the second quarter of 2006 to $663 million in the second quarter of 2007. The commercial loan portfolio, including higher yielding commercial real estate and construction loans, increased by $65 million and the residential real estate portfolio grew $5 million. Jan A. Miller, President and CEO stated, "In this competitive market, we have been able to record solid loan growth while maintaining our high credit standards. Our commercial loan portfolio has increased 19% in the last 12 months. In addition, our deposit base has also seen some recent growth in core transaction accounts. The relatively flat yield curve and the accompanying margin compression continues to impede our net interest income, despite the success we have had in growing the balance sheet." Average deposits increased $12 million from the second quarter of 2006 to the second quarter of 2007. As market rates have risen over the past year, deposit customers have migrated away from money market and savings accounts, which are down $27 million, and into higher yielding certificates of deposit, which are up $25 million. Demand deposits and NOW account balances are up $14 million or 18%. In addition to the increase in deposits, an increase in borrowed funds of $38 million was used to help fund the growth in the loan portfolio. Net interest income was $6.6 million in the second quarter of 2007 compared to $7.1 million in the second quarter of 2006. Continuing margin compression has reduced the Bank's net interest yield to 3.19% in the second quarter of 2007 compared to 3.71% in the second quarter of 2006. The provision for credit losses was $250,000 and $225,000 for the six months ended June 30, 2007 and 2006, respectively. The increase is entirely attributable to loan portfolio growth. The reserve for credit losses was $7,237,000, $6,984,000, and $6,284,000 representing 1.07%, 1.10% and 1.05% of total loans at June 30, 2007, December 31, 2006, and June 30, 2006, respectively. The Bank had net recoveries of $3,000 in the first two quarters of 2007 compared to net recoveries of $4,000 in the first two quarters of 2006. The Bank had no nonaccrual loans at June 30, 2007 and 2006. There was one nonaccrual loan for $86,000 at December 31, 2006. Total noninterest income was $3.2 million and $2.8 million for the six months ended June 30, 2007 and 2006, respectively. In the first quarter of 2007 the Bank sold one property held for investment purposes and recorded an $850,000 gain on the sale. The rental income associated with this property was $123,000 in the first two quarters of 2006. The 2006 period benefited from a $240,000 award from the Community Development Financial Institutions Fund of the U. S. Treasury. The award was provided in recognition of the Bank's lending activities in distressed communities. In addition, there were insignificant increases in investment management fees, bank owned life insurance income, and loan fees in the amounts of $67,000, $27,000, and $17,000, respectively, which were offset by decreases in net security gains and deposit service charges of $88,000 and $61,000, respectively. Total operating expenses were $11.5 million and $12.0 million for the six months ended June 30, 2007 and 2006, respectively. Occupancy and equipment costs were down $175,000 due to lower depreciation charges, maintenance costs, and property taxes. Advertising and promotional costs were reduced by $94,000 to $224,000 in the first two quarters of 2007. The Bank recorded non-cash charges of $237,000 in the first two quarters of 2007 compared to $318,000 in the first two quarters of 2006 related to equity investments in affordable housing projects. These pretax charges will be more than offset by tax credits available to the Bank. These community development investments are part of the Bank's nationally recognized commitment to community development activities. The Bank's current CRA rating is "Outstanding". In an earlier period, the Bank sold its credit card portfolio. The first two quarters of 2006 included $74,000 of final processing costs related to the sold portfolio. Partially offsetting the above was a $150,000 increase (+2%) in compensation costs due to normal merit raises and higher medical cost as well as a $50,000 increase in debit and ATM card expenses. With Boston branches in the Financial District, Back Bay/South End, Jamaica Plain, Cambridge branches within Harvard Square, Kendall Square, Central Square and the Fresh Pond Mall, its Watertown, Somerville, Newton, and Brookline branches, Wainwright is strategically positioned to provide consumer and commercial mortgages, loans, and deposit services to individuals, families, businesses, and non-profit organizations. This Press Release contains statements relating to future results of the Bank (including certain projections and business trends) that are considered "forward-looking statements" as defined in the Private Securities Legislation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to changes in political and economic conditions, interest rate fluctuations, competitive product and pricing pressures within the Bank's market, bond market fluctuations, personal and corporate customers' bankruptcies, and inflation, as well as other risks and uncertainties. FINANCIAL HIGHLIGHTS: (dollars in thousands) Three months ended June 30, 2007 2006 Net interest income $ 6,578 $ 7,136 Provision for credit losses -- 100 Noninterest income 1,292 1,258 Noninterest expense 5,668 5,938 Income before taxes 2,202 2,356 Income tax provision 484 648 Net income 1,718 1,708 Net income available to common shareholders 1,643 1,633 Earnings per share: Basic $ 0.22 $ 0.21 Diluted $ 0.20 $ 0.20 Return on shareholders' equity (annualized) 9.78% 10.38% Return on assets (annualized) 0.79% 0.84% Net interest yield 3.19% 3.71% Weighted average common shares outstanding: Basic 7,576,788 7,691,552 Diluted 8,574,251 8,686,110 FINANCIAL HIGHLIGHTS: (dollars in thousands) Six months ended June 30, 2007 2006 Net interest income $ 13,207 $ 14,107 Provision for credit losses 250 225 Noninterest income 3,211 2,760 Other noninterest expense 11,481 11,954 Income before taxes 4,687 4,688 Income tax provision 1,130 1,295 Net income 3,557 3,393 Net income available to common shareholders 3,407 3,243 Earnings per share: Basic $ 0.45 $ 0.42 Diluted $0.41 $ 0.39 Return on shareholders' equity (annualized) 10.25% 10.33% Return on assets (annualized) 0.84% 0.85% Net interest yield 3.30% 3.73% Weighted average common shares outstanding: Basic 7,584,899 7,714,985 Diluted 8,581,051 8,710,321 at June 30, 2007 and 2006 Total Assets $ 882,736 $ 791,995 Total Loans 678,156 598,839 Total Investments 137,992 118,213 Total Deposits 621,264 598,208 Shareholders' Equity 69,399 65,137 Book Value Per Common Share $ 8.18 $ 7.97 James J. Barrett Senior VP and Chief Financial Officer Tel: (617) 478-4000 Fax: (617) 439-4854 Website: http://www.wainwrightbank.com/ DATASOURCE: Wainwright Bank & Trust Company CONTACT: James J. Barrett, Senior VP and Chief Financial Officer of Wainwright Bank & Trust Company, +1-617-478-4000, or fax, +1-617-439-4854 Web site: http://www.wainwrightbank.com/

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